Considering the current crypto-market, one thing is for sure, only companies that hold their ground during scams and hacks survive the crypto-space in the long-run. A recent example of such a recovery was Binance. Despite a hack that cost Binance 7,000 BTCs, it still managed to maintain trust in the community. After a few troublesome months, Bitfinex now plans to follow Binance’s path.
While the exchange maintains its innocence in court, Bitfinex recently announced the launch of its new venture, Tokinex. The project is aimed at building an Initial Exchange Offering [IEO] platform to help crypto-projects raise funds through token crowd-sales. A recent research report suggests that IEOs are in the lead, with at least two dozen exchanges launching IEO platforms.
According to research conducted by Inwara, Asian countries are currently dominating the list of IEO launchpads, in spite of China and South Korea’s negative stance on crypto-adoption. One of the primary reasons why crypto-exchanges are interested in IEOs is that the launch of an IEO can boost the price and trading volume of its in-house tokens. It is important to note that the price of BNB has risen by 466%, ever since Binance started launching IEOs.
Additionally, Binance is widely credited for popularizing the IEO model and in the process, raised $85 million, with Gate.io leading the charts with $290 million in raised capital.
While this initiative is funding crypto-exchanges and ensuring its financial stability, the practice has also resulted in losses for end users by supporting fake tokens. While none of the exchanges take direct responsibility for their users’ investments, experts suggest doing one’s own research is a prerequisite to participating in new initiatives.
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